The global LED materials market will grow from $5.01bn in 2013 to $11.71bn in 2018, according to a new study from Frost & Sullivan. As LEDs are rapidly taking the place of older, less durable and energy-efficient lighting technologies around the world- and since chemicals and materials are needed at all stages of the LED fixture’s manufacturing process - chemical companies will play a critical role in the future of the LED industry, notes Frost & Sullivan. The breadth of material requirements means that few market participants have visibility across the entire market, creating the need for a holistic vision of market potential, it adds.

The study ‘Analysis of the global LED materials market’ (which includes applications for chemicals through the four stages of the LED manufacturing value chain: chip fabrication, packaging, module construction, and fixture assembly) finds that revenue growth in chemicals demand is expected to be ahead of growth in the LED industry itself.

Historically, demand for LEDs in electronics applications such as display backlighting has driven growth in chemicals demand for LED applications. However, this market is now relatively mature, and demand from the general lighting sector will dominate future growth, says Frost & Sullivan. Of the four value chain tiers involved in manufacturing LEDs, the greatest need for chemicals will emerge from the final stage, assembling the fixture.

“While prices of LEDs are falling at all stages of the value chain, price pressure is particularly strong in the packaging stage,” notes Frost & Sullivan’s Chemicals, Materials & Foods Analyst. “As a result, chemical companies that offer innovative products enabling cost savings for LED manufacturers will be well positioned to succeed.”

Further, market participants must leverage design opportunities offered by the LED space, the firm adds. Unlike traditional luminaries, LED light sources need not be designed around a replaceable bulb. The possibilities for innovative designs and material options will give rise to opportunities that did not exist with previous lighting technologies.

“Chemical companies therefore need to partner with fixture manufacturers to help them understand how chemicals and materials can be used to design the LED fixtures of the future,” says the analyst.